Financial Samurai August 2020 Review: The Twilight Zone

To help remember the pandemic time period when I'm older, I've decided to do a recap of some highlights and lowlights of each month. Here is my Financial Samurai August 2020 review.

I'm sure 20 years from now we're all going to look back with wonder at all that transpired.

Overall, I feel like we're living in the twilight zone. On the one hand, fortunes have never been greater. On the other hand, uncertainty has never been higher.

I would much rather have less fortune and more freedom and certainty. Wouldn't you?

Financial Samurai August 2020 Review

Physical And Mental Health

All of us continue to be healthy, which is something I cannot take for granted. Between Dec 1, 2019, and Feb 15, 2020, I was sick 80% of the time to varying degrees. At some point, so were all my family members. There was some super-cold that went around preschool. Maybe it was COVID, I'm not sure.

I'd really like to go to at least Feb 1, 2021, without getting sick again. And if I do get sick, I hope it lasts for less than two weeks like usual. Therefore, to help cope with so many things still being shut down, I remind myself to appreciate my health.

Actor Chadwick Boseman's death hit home because I'm 43, the age he died. I'm amazed he was able to film all those movies after he was diagnosed with late-stage colon cancer. He has inspired me to work through adversity.

Chadwick's death is also a reminder to be kind to others. You never know what people are going through behind closed doors.

I enjoyed watching his commencement speech at Howard University. If you are seeking some motivation during these uncertain times, it's worth watching as well.

My favorite passage:

Purpose crosses disciplines. Purpose is an essential element of you. It is the reason why you are on the planet at this particular time in history. Your very existence is wrapped up in the things you are here to fulfill. Whatever you choose for a career path, remember the struggles along the way are only meant to shape you for your purpose.

My mental health seems fine. It is supported by regularly playing tennis and softball 3X a week. I always feel better after I exercise, even if it's just going for a 30-minute walk. In April, when everything was shut down, my mental health was at its poorest.

Writing is also a great way to exercise the mind and address any negative emotions you might have. I encourage you to give it a try.

Family Happenings

Whenever I need a pick-me-up, I always go and spend time with my eight-month-old daughter. She always smiles when I enter the room. There's nothing I enjoy more than snuggling with her! She is just starting to crawl. She also has her two front lower teeth. We feel very blessed that she is healthy and in our lives.

My son is still hit or miss. He can be very loving one moment and cold the next. We have some great moments, especially when we are playing outside. He is starting to say “I love you daddy” and “I missed you daddy” more to my delight.

However, everything people say about threenagers is true. The tantrums are often explosive. I wonder when his emotions will become more stable.

Since April 2017, I have heard a cry and/or a whine multiple times a day, every day. It's a part of parenthood, but it's also hard on the nerves. I feel for working parents without any childcare or school options. If my wife and I are exhausted every day, I'm sure working parents are as well.

The desire for more space by working parents will absolutely drive the demand for larger homes in the near future. Bigger homes are better from now on.

Social Development Needed

One concern I have is whether my boy will be socially stunted if he does not start regularly interacting with kids his age going forward. We are very focused on teaching him good manners.

Whenever I bring him to our neighborhood playground, he tries to say hello to other kids. He's finally seeking social interaction, which he hadn't been before school shut down.

Given we're not sending him back to preschool this fall, I've reached out to other parents to arrange playdates outside. I'm hoping that the benefits of one-on-one play with another child and family we trust outweigh the risk of getting COVID.

How sad and infuriating I have to write this. If any parents out there have children who didn't go to preschool and who are great socially, please send some assurances.

Finances Doing OK

With stocks at record highs, it's no surprise that our net worth is also at a record high. According to Personal Capital, our net worth is up about 12%, which surpasses our annual target of 10%. If things hold, 2020 will turn out to be a record dollar net worth gain.

However, we are slowly losing ground on our outperformance versus the S&P 500 given our net worth is more conservatively allocated. That said, our baseline financial benchmark is to grow our net worth 3X the 10-year bond yield. Therefore, we are satisfied.

I regret selling names like Tesla earlier in the year, but at least I've still got some shares. What I kind of forgot was that I also have names like Apple in my rollover IRA, which has helped.

It is hilarious to me that retail investors are driving up share prices after stock splits, despite no change in fundamentals. Discipline is important during times of mania.

I'm not investing any more in the stock market at current valuations. Further, stocks have reached the upper limit of my net worth at ~25%. Instead, my main focus is on stacking cash to buy a larger ocean view home in San Francisco, which I've found.

I wouldn’t be surprised if August is as good as it gets in the stock market. Valuations are just way too expensive for my taste.

Real Estate Stays Strong

The San Francisco real estate market is interesting. There has been an increase in condo inventory in the downtown area, causing prices to soften. However, the supply for single family homes seems normal. Therefore, prices for single family homes continue to be strong, especially with the NASDAQ up 35%+.

San Francisco real estate sales example during pandemic 2020
Listed for $2.695M, sold for $2.825M on 9/10/2020

On the landlord front, both sets of tenants have continued to pay rent on time all year. Their jobs are flexible and they are well paid. Back during the 2008-2009 financial crisis, I didn’t have any hiccups. Hopefully everything will work out again.

Once I'm done with my home remodel this year, I should be able to sell it for a 20% – 25% gross profit. The selling price is based on my analysis and the opinions of six realtors whom all recently sold homes in my neighborhood.

I'm just not sure whether I want to sell given the location, the views, and the fees. A home's importance has never been greater given how much more time we're spending at home.

A couple of my friends are buying 2nd and 3rd homes for their immediate family members to create a family cluster in their neighborhood. Maybe I'll do the same.

In August, I got a nice real estate crowdfunding distribution of $4,248 after a $9,714 distribution in May. This was an unexpected surprise.

I continue to conservatively value my physical real estate holdings. But it was fun to play around with my net worth when I bumped the values to where one reader thought I should have sold one of my homes for in 2017. The spikes in my net worth chart below reflect the valuation adjustments.

August 2020 Financial Samurai Review

Demographic Shifts

I've definitely noticed a migration to the western part of the city, which is helping prices. Demand is coming from people living in condos downtown who want to rent or buy single family homes. I know this because I recently went through the tenant search process.

With stock prices way up, I'm glad to convert some of the funny money into a larger home for my family. The more people who leave San Francisco, the less I want to relocate to Honolulu.

I'm surprised that the lockdowns in Honolulu are even more severe than in San Francisco. For example, Honolulu residents can't even go to the beach to lie down!

Finally, I earned another surprise financial windfall in August that I'll discuss more about in an upcoming post. It was a private equity investment I made in late 2014.

Financial Samurai

July was a good month in terms of traffic. I thought it wasn't going to be beat for the rest of the year. But it turns out that August was an even better month. I'm thankful because July and August are historically two of the slowest months due to summer vacation.

I did spend a lot of time updating older posts, which may have helped. However, I didn't do anything more than publish my normal 3X a week cadence. I did have one or two posts do well on larger media outlets.

There's pent up advertising spend from 1H that is being unleashed in 2H. I sense that many companies are trying to “catch up” as there is a competitive fear of being left behind.

If the strong data from Financial Samurai is a leading indicator for the economy, then we should feel pretty sanguine about the future. Analyzing my traffic data shows the fear is almost all gone, which could be a bad thing.

However, two months of strong traffic does not make a trend. I think September is going to be down because we're all exhausted. Let's see.

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And to listen to my podcast, here's my iTunes, Spotify, and Google Play channels. It's been fun doing more recordings with my wife.

A Key Revelation

Stress management is something I've been good at for a long time. As an aging athlete, I've had to stay calm under pressure many times to win tennis matches. While working in finance, I had to control my anxiety given big money was often at stake.

On orphan girl in Iraq. Our children are why we fight so hard.

Since leaving work, my stress and anxiety have fallen dramatically. I'd say it went from a 6 to a 3, compared to a baseline of 6. However, ever since I became a father in 2017, I've noticed my stress and anxiety take a u-turn upward to a 6 and sometimes higher. The main reason for the increase is the concern I have for my children's future.

All this racial tension in America reminds me of my past racial encounters growing up in Virginia. After each incident, I then wonder whether my children will experience similar racism as they get older as well. Hopefully, these encounters will make them grow stronger, not weaker. However, you just never know how some people will react to trauma.

With each preschool rejection letter (six total), I was reminded how poorly positioned my family is in society. As two unemployed parents, we lack status which society always covets.

I thought being a stay at home dad who could volunteer a lot and being a two-time high school tennis coach champ would be looked upon favorably by admissions. I’m in a unique position where most of my time is focused on childcare, education, and community involvement. Guess not.

The Need For Some Status

Starting in late-2018, I began to contemplate whether it was worth climbing the status ladder again for the sake of my children.

Would I have to get a “high-powered” job? Would I have to lose my privacy by telling admissions I run Financial Samurai, which really doesn't mean much? Do I have to join company boards? Do I need to start accepting TV interview requests?

Once you've been out of the status game for so long, you will loathe the idea of getting back in. I’m happy to be a nobody. But being a parent is no longer just about you anymore.

Thanks to the pandemic, I'm pleased to report there's no longer a need to seek status or fame! The pandemic has helped equalize life because we're mostly all stuck at home.

Thanks to less competition, we've now got more schooling options. For example, the preschool we ultimately got accepted to says it still has several spots. In the past, this never would have happened. Now I'm hopeful there will be less competition for public and private grade school spots down the road.

Therefore, I'm pumped about big city living again for ourselves, for our children, and for other families who choose to stay.

Six months into the pandemic, my stress level has dipped back down to around a 4 out of 10. Clearly, a massive financial recovery plays a big roll in feeling better as well.

Hooray for being allowed to retain nobody status!

The Start Of Samurai September

It feels like many of us jumped off a cliff and landed in a big vat of cash. It is truly absurd how much wealth has been created during this pandemic for investors so far.

Financial Samurai August 2020 Review: The Twilight Zone

Trying to beat a record online month is difficult. This is where investing in other motivated assets can really pay dividends. When you want to take it easy, hopefully, they'll keep on going.

I plan to spend more time with family, write less, and work more on my health in Samurai September. I'm worn out and really need a break.

Instead of always waking up by 5 am to write, I hope to sleep in until 6 am or 6:30 am if my body will allow. It's been tricky because I've been automatically waking up around 5 am since 1999.

I've got to find some way to train my mind to let go. In essence, I will be focusing less on entrepreneurship and more on retirement again.

I'm also going to contact the foster home and rehabilitation center for the disabled in my neighborhood and ask if I can help donate my time and money.

September and October are golden months in San Francisco due to the great weather. Further, with school restarting, places will be less busy. We plan to go on a couple family vacations to Napa and Lake Tahoe.

Here's to taking it down a notch and holding on to what we've recovered!

How was your August? Are you as exhausted as I am? How much better do you think the year can get? Any tips on worrying less as a parent? Any tips on how to sleep in more and/or reduce the desire to grind?

38 thoughts on “Financial Samurai August 2020 Review: The Twilight Zone”

  1. How to master sleep: (it is still a journey)

    Find a room temperature that works for you.

    For summer: I set my thermostat to 75 degrees.
    I then use an Ooler which is an hourly controlled matress pad, start the pad at 67 degrees and slowly warm up to 69 by 2 am and 70 degrees by 3 am.
    I use a Moona but have modified it to put in a pillow between my legs, I set this temperature to 82 degrees. I weigh 210 lbs and am 5′ 10″. I have a ceiling fan going for circulation.

    Winter I set thermostat to 68 degrees, Ooler to 72 degrees and Moona to 82.

    Target goal is 7 hours 15 min of sleep, ideally with at least 80% sleep efficiency.
    I use an Apple watch and the App Autosleep to measure.

    I get four metrics: my resting heart rate ranges from 43 to 52, typically around 49.
    Ideally I get 2 hours of deep sleep and 5 hours of quality sleep. I can still function pretty well with 5 1/2 hours.

    I only drink caffeine before 9:30 am, go to bed by 10 pm awaken at 6:30 am.
    Once a week I go to a stretch session with a professional. That can greatly help.
    Do occasional Yoga, spin 2-3 times a week for 45 min.

    I have 5 rental properties in San Diego. Age 51, two kids and stay at home wife.
    Moderate stress job in medical field. Work is optional but gives me a sense of purpose.

  2. This was a pretty interesting idea for an article. An online journal of sorts? I also think 2020 will be one of those years that everyone asks about well after are all dead and gone.

  3. Your kids will be fine. Mine never went to preschool or daycare (they are 7 & 4) because our thoughts are they will have enough schooling in their future why take them away from their parents earlier then needed.
    That being said we do playdates at least 2x a week with several families and they play with the next door neighbors child at least 5x a week. Having relationships with other kids is important.

    1. Sam, I think non-confinement child raising is best with an active parent. Activities outdoors and with other people doing interesting things is natural versus a strained “preschool” or “school” environment where similar aged children form clicks and compete. As children grow let them work with you where possible and let them feel the effort/reward connection. Keeping them away from artificial confinement will foster more creativity as they run their own lives versus always looking to please the teacher. Who needs that stress and much less stress for all spending time with family and look out for genuine friends with shared interests as they get older. I will say its great to allow them open ended time interacting with other children to develop negotiating and basic social skills etc. but its nicer outside of a confined classroom with parents moderating in background. For racial issues it seems we need a common vision based on what is Good to stay a peaceful society. It is not about money at its core or with a particular group as all groups have wonderful and some less than wonderful individuals. We need to learn historically what brought about freedom without chaos. Why did western societies provide such freedom while still being orderly. Why did the people behave and form functional families and peaceful crime free neighborhoods.

  4. Hi Sam,

    I have been a diligent reader of Financial Samurai since I was in college (started reading somewhere between 2011 and 2013) and it is has been so invaluable in preparing me for the rest of my life when it comes to building wealth and managing all of it. I’ve become (for better or worse) obsessed when it comes to monitoring Personal Capital.

    I can’t thank you enough for the content on your site. Little did I imagine I would grow up in Florida graduate from Florida State in 2014 at age 23 with no student debt only to move across the country to Phoenix to work for General Motors at a good income in their IT innovation center and move again in 2019 to Bellevue, WA in the Seattle metro. You were right in that by moving to a higher cost of area Seattle vs Phoenix I gave myself a chance to greatly increase my income. I took a 53% pay increase for moving here and my significant other and I reunited after she had to relocate from Phoenix to Los Angeles due to her company restructuring. Fortunately she was able to transfer from Los Angeles to Redmond WA a month after I moved here.

    I’ve been diligently maxing my 401k since moving here and able to save much more by not inflating my lifestyle since moving from Phoenix while paying no state income tax in Washington and splitting rent with my girlfriend. Thanks to you I hit the 200k net worth mark a few weeks before I hit my 29th birthday.

    Recently I’ve been paying large attention to your home buying guides (20% down payment keep 10% cash buffer for emergencies) sticking to the 10% gross income car rule for an engagement ring, and debating going for the 10/1 ARM on my first mortgage vs a 30 year fixed (now that interest rates have tanked even further). Thanks to you when the market corrects 10% or more instead of focusing on lost unrealized gains I pound the table and buy more indexes because the market as a whole is thinking short term and I’m playing the long game. This “fire sale” thinking really saved my butt in March this year when everyone panicked and I felt bad but decided I’d feel even worse if I sold so I should capitalize by increasing my investment contributions. I think I’m developing a stomach for volatility.

    I left a comment on your above average person net worth post (I know you are inundated with people reaching out for feedback and you have tons of other commitments beyond Financial Samurai but wanted to get your perspective on my current situation).

    As a freshly minted 29 year old I know I’m too cash rich (because I’m trying to buy a house in the Pacific Northwest). I’m thinking of putting 20% down (split 10% each between my partner and I). I will hit your net worth target for age 30 (250,000) but I’m worried I am somewhat misallocated as 50-60k of my worth will be equity in the home and I’ll be keeping a 10% cash buffer of the home’s value for emergency fund purposes with the rest in Roth, and 401k accounts invested aggressively in equity indexes. I figure I have a long time to work so dollar cost averaging will continue to serve me well. Do you have any suggestions for how to optimize my situation so I can keep hitting or exceeding these above average person benchmarks? I’m maxing my 401k and Roth IRA and will invest even more in the equity markets once the house is purchased as I will hopefully not need to accumulate this much cash again.

    Once again I can’t thank you enough for steering me in the right direction over the last 6 years of my career. I never received this degree of financial literacy growing up even though I grew up in an upper middle class household (it was never a point of discussion). I feel all kids and young adults should have the info you provide discussed early and often with them so that they truly understand how their financial decisions impact their quality of life. A financially literate society would improve so many lives. Thanks to you I have no debt and the mortgage debt will only be temporary!

    You have been a great Financial mentor for me and I am sure you will continue to be for many others for years to come. Your efforts are truly appreciated. I look forward to your future posts!



  5. “With stocks at record highs, it’s no surprise that our net worth is also at a record high.”

    You only have a 25% exposure to the stock market, so I’m not sure how stocks being at record highs have much of an effect on your net worth? You are mostly in real estate and bonds, right?

    1. Yep. If all other assets are flat, my net worth goes up due to stocks. But bonds are up double digits and SFH real estate is up at least 5%. Then there is my business etc. Hence, +12% YTD.. but maybe up to +20% – 25% if I mark to market everything.

      Better to be conservative.

  6. He’ll be fine!! My oldest went to an Ivy,never went to preschool,has multiple friends groups. My advice to any parent is to read to your child often every day, almost no tv when very young, talk to them and ask them questions about what you/they are doing as your day progresses.

  7. Thank you for your newsletter and commitment!
    Reading your blog helps me to learn and I appreciate the variety of tips and methods.
    It’s so helpful to have a list of online places to go where we can improve ourselves and not simply look at the same old sites. I have a 3 year old and an 8 month old too. The 3 year old is back in pre-school and loves it. We use a babysitter to help with the younger one while mom works. Occasionally we use playgrounds where we live in Berkeley or elsewhere. I’m in property management and our building across from campus (on northside) is nearly half empty! Not a time to look for tenants. It’s especially tough for the units that typically have 3-4 roommates. We are trying to hold on! That said, I’m looking forward to being more proactive with cash and keeping it invested in a beneficial mix of investments. Will certainly keep reading and utilizing your information. Just wanted to say hi and thank you for your excellent blog and sharing your personal experiences.

    1. Nice to hear from you David! Wow, a 3-year-old and an 8-month-old too. Blessed!

      That’s great your 3-year-old is enjoying preschool again. We’re going to give it at least a month for our school to work out the kinks and see how it goes.

      Unfortunately, come December, it’s going to be rainy season again and they won’t be able to play as much outside. So really, the best time to go to prschool is Sept and October and then pull him out when the rain begins. I’ll talk to my wife about this.

        1. No, it’s pretty fun to think about various scenarios. It’s what financial analysts do when analyzing investments. Then we try and make winning bets. Same thing with playing poker, which I’m an avid player.

          To me, I find it strange why people don’t do various scenario analysis. It’s free to do, so I’m not sure why it’s not done all the time.

          I think some psychologist came up with the term Pre-Mortem analysis as well, versus post-portem and always reacting to causes. If you can pre-mortem, then you can better prepare for various curve balls.

          It feels at 71, you are too focused on money and how rich you are based on all your comments. Why not focus more on time and enjoying life with family etc?

  8. Don’t normally post but appreciated the family happenings. We also have an 8 month old (son) who is starting to crawl and sporting two new teeth (that he deploys with great ferocity at times). He also smiles when I enter the room and we feel blessed to be able to work remotely and spend all this time with him. Frankly, remote working at home with him has completely changed our lifestyle goals post-COVID.

    All the best to your family.

  9. I definitely relate to the “landed in a vat of cash” statement. I live in the Boise area and all of my properties are absolutely screaming with appreciation. People escaping the turmoil of the coast are pouring in so quickly the construction can’t keep pace. This and existing homeowners reluctance to sell is doing something to prices here I never thought possible.
    I came to an interesting realization lately. I’ve found that my income from work and savings really accounts for very little of increase of my net worth. My investments account for something like 80% of it. It seems to become more true as time wears on.

  10. Sam, you are 43, I am 43. You have a 3 year old, I have a 3 year old. My little guy is also not going to pre-school this year, and he’s doing fine. Your child is going to be great. Really, it’ll be fine. Get them outside, practice counting to twenty, ABCs, and lots of love, and you are nailing it! Ignore the Ivy League pre-school noise.

    1. Have two kids – 3.5 and 1.5. With what google is doing around education for certain fields, I could see a scenario in which talented high schoolers just go direct to work at a company (with a 6-12 mo training program). This is in 10+ years I suspect.

  11. One of our daughters had social anxiety as a child which took till middle school to improve, and as a 20+ year old now she has a FT job, had tried her hand at various entrepreneurial side gigs (with all the self-promotion that comes with that) and has traveled internationally multiple times solo (of course, pre-pandemic!). Children are remarkably resilient so hang in there!
    I do worry about long-term effects of the social isolation (for kids and adults) and the rapidly growing inequity in healthcare, education, income and overall well-being. I saw a post on CNN today that showed 30% of the US feel like the economy is good. I guess these 30% don’t know any first responders, frontline workers, etc. That’s like tweeting “Stay safe!” from your mega-yacht at the height of a pandemic when multitudes don’t have the luxury of even isolating at home — oh yeah, a music exec actually did that!

    1. Cool beans. Yeah, it’s just hard to know while you’re in the thick of things. Glad your daughter is doing well!

      Hopefully other kids are as well. I’m not worried about my wife and I bc we have each other and some friends through activities.

      Really got to regularly exercise. So important for mental health.

  12. Hi Sam,
    Just reading this post now… after and “interesting” day in the market. Can’t wait to see what tomorrow and next week bring!

    1. It’ll be interesting for sure to see if the mania continues or not. It’s a long as we have the proper risk exposure, it doesn’t really matter.

      What matters is living our best lives now!

  13. My son is in a private school kindergarten, but I feel your pain when it comes to the social isolation yours is enduring. On the one hand, kids are very flexible at this age. But on the other hand, I could see the negative effect on my own child after a month or so of isolation. So I was glad to see in-person classes reopen. This is a critical age for them. They’re learning conflict resolution, sharing, collaborative play, and so many other things. I try to be a good playmate for my son, but it’s never going to be the same as an interaction with someone in his own age range.

    Regarding the size of homes, we have a 2300 sf single story California ranch house, and one of the big attractions of the property was that it’s something large enough for a family but small enough that we could live here forever. We can clean, furnish, and maintain it ourselves without eating a hole in the budget.

    We have 1/2 acre of land, which is uncommon for coastal Orange County, but the way they build homes ever closer and closer together, I can’t help but think homes like ours will command a premium in the future.

  14. Funny i am a northern NJ guy living in a TH too. He’s spot on about houses getting multiple bids. i went to an open house last week and the line was 6 families deep to get in to see the house. (with Covid RE agents only allow 2 families in at a time). It’s insane
    But out here you really need to look at the affordability index( each 100k in a mortgage is roughly $425 a month) but taxes can make a huge difference. If taxes are 1500 a month in one town but only 700 a month in another that equates to about 200k in the price of the house.

    I am an NYC worker but working remotely and never plan to go back (if i have my way)

  15. Christine Minasian

    So you mentioned you sold Tesla beginning of this year…. I’m not a fan of buying individual stocks but love the cars and the CEO of that company! Is it a good buy do you think now that it split?

  16. Ms. Conviviality

    Sleeping in is my favorite thing to do during the weekend. I’m the type of person who could close my eyes and be asleep in two seconds and not have to wake up with the morning sun. I think this comes down to drive/motivation which I believe is propelled by fear. Figure out what your fears are and prepare as best as you can for them. Then, let go of the things you can not control.

    1. I’m envious you can control your duration of sleep. I just wake up after 5-6 hrs, regardless of when I go to bed.

      At least it’s natural. A lot of the reason why I wake up early is bc I’m curious about what happened overnight. Lots going on, which is exciting. But also tiring.

  17. ConfusedNJBuyer

    Great comments and thoughts in this article. You touch on the rise of the condo owners moving into single family homes in the SF area.

  18. Always been a fan of your site, Sam. One of the few blogs I come back to regularly because the insight is usually great.

    I run a website that I hope to turn into a full-fledged adventure company at some point. But I struggle building enough online interest in it to motivate me to start offering actual paid services. So now I continue to work remotely for a company while trading stocks and other assets to create a buffer for me and my family.

    Your point on single family homes is spot on. I was fortunately enough to buy a bigger property last September (’19) when prices were lower and interest rates were still very good (though maybe not as low as now). Now both me and my wife are working from home and have plenty of distance between us! I’m downstairs in an office in the den, next door to the garage, and she has a set up upstairs. Keeps the relationship healthy I suppose. All the land we have also helps keep me occupied. It’s so much better than living in cramped spaces. I feel for those who are in that situation.

  19. Tristan Hair

    Look at you embracing stealth wealth and low stress. Just make sure you listen to your gut if you get that drive going again.

  20. Hi Sam,

    Encouraged and inspired by your posts, I had been tirelessly looking to buy a sfh in NoVa during the whole pandemic. The price has been very strong and I lost almost 10 times, now finally under contract with a medium price sfh (1.2+m) about to close end of this month.

    Completely agree with you that we will see a divergence of RE market: bigger house with bigger lot will increase strongly, while cramped spaces, especially condos are not going to appreciate or even depreciate. It is fundamentally a supply-demand issues: in cities you can always build more high rising condos, but the number of sfh lots are not gonna increase.

    So I plan to sell a TH and use the equity to buy a larger sfh in the next 2-3 years. Just wonder what is your view on the next 2-3 yrs RE market? Now rates will stay zero for 5+ years, will home price go completely out of control?

    1. I suspect demographic trends will support home prices for the next 5 years.

      A home has risen to the top of the charts for assets to own.

      I would just focus on enjoying your home first. Appreciation is secondary.

      If you are enjoying life, you’re winning no matter what happens!

      1. We live in Oakland and two nice condos near us, one without much of a balcony, sold for the TOP of what we’d expect (all we’re 2/2 config).

        I guess that is SF people moving here for MORE space but not a lot of space.

        I still see a lot of panic buying and have started seeing homes that sold 1-2 years ago going on the market again (and not really showing appreciation). I think we will see more stress in the market in the coming months. Low rates are great but only if you can get preapproved and afford it.

        Also if all these small businesses actually go under, who will buy all the Facebook and google ads? The markets at many levels seem irrational.

  21. None of our three now grown millennial kids went to preschool or day care. My wife chose to be a stay at home mom and the last thing she wanted was less time with the kids. They’ve turned out to be pretty great adults with six degrees among the three of them (chemical engineering, biological engineering, civil engineering, business/entrepreneurship, adult education, medical doctor radiation oncologist and a PhD in progress). They all have many friends and are very social. None receive financial support from us. Preschool is a very modern invention designed to free up both parents for full time jobs I would guess, not because evidence showed K through 12 to be inadequate. My kids were all A students, all got totally free rides to college including books, fees and room and board and never seemed to have missed anything preschool might have given them. Of course all kids are different and times are different in this generation but as engaged as you two are as parents I can’t think your kids will turn out any way except extremely confident and well balanced socially and academically. And unlike my kids who inherited few athletic skills from physically unremarkable parents, yours stand a good chance of getting some of those too.

  22. Congrats on a well rounded August! Those milestones with your kids are so sweet. They grow up so fast!

    I’m pleasantly surprised with the state of the stock market given we are STILL in this pandemic. I really did not expect it to be going on this long. I really thought the upper max limit would be 3 months. Nope!

    It’s crazy that flu season is upon us but I would hope that with everyone (or most people’s) increased personal hygiene and precautions that it won’t be a bad flu season at all. I’m very curious to see how it plays out.

    Here’s hoping to a happy and healthy September and some beach weather in SF! I can’t believe Hawaii closed their beaches?!

  23. Sam I got a kick out of reading this post. After reading your blog website and getting inspired by it, I launched my financial blog in July 2020 and since then, I have also been waking up around 5 am with ideas on subjects to write about. This blogging thing is no easy work (smile). Good thing my wife is supportive just as I am sure your wife was supportive when you started your venture into the blogging world ten years ago. Like you, I enjoy writing and helping people improve their financial habits.

    I feel your pain in this post. Take a break buddy. Enjoy your kids now. We will always come to visit FS every day just to catch up on other articles you have posted. And help maintain the traffic at a level you can relax.

    Question for you. I have been reading that San Francisco is hurting now since most folks are moving away from the big cities like SF and NY. Do you see this trend? And why would you want to sell your home at at 20% markup when you can rent it? I am looking to buy another home in Washington, D.C. to rent the one that I own now. I already have one home rented. Basically my question, why are you selling instead of renting? Passive income remember. I know you have mentioned you want to cut back on the pains that comes with renting (collecting rent, bad tenants, etc.) But you had a nice 2008 and so far all our tenants have paid. It means you are diligent about who you rent your homes to. Again, why sell?

    Economy Chief

    1. I haven’t made a decision to sell or rent. But in 2017, I did sell a rental home because I wanted to be a focused first time dad. Dealing with tenants, especially five guys, was not enjoyable.

      I like to do both, test out the rental market and sales market to make the best decision possible.

      Based on the listings I’ve seen so far, single-family home sales are pretty strong under the $2 million mark. I’m sure condos downtown or weaker given there’s always been a supply issue anyway.

      People want it on single-family homes with some outdoor space and more space in general. And this is the asset class and I mostly own.

      I think people have to be careful about believing everything they see in the big media. Instead, people should use big media fear and exuberance as a way to get better deals. A lot of exaggeration in the headlines to get views.



  24. ConfusedNJBuyer

    Hi Sam,
    Great comments and thoughts in this article. You touch on the rise of the condo owners moving into single family homes in the SF area.

    Would love your take on the housing bubble because here in the Northern NJ area, homes that would’ve been at $599 are now going for $799 due to the migration of wealthy residents from NYC buying up all this open space in the “burbs.” Forget about it if the house has a pool. My wife and I are Condo living here in Northern NJ, and now that we’re both working from home (both of us in each bedroom), we’re itching for more space. You think we should buy in this crazy market or will the threat of COVID go down and prices come back down to earth in the winter?

    1. I would think if anything, the demand for single-family homes would continue to go up during the winter. Winter makes living area smaller. You’re forced to stay inside more which means the desire for bigger interior space simply increases.

      Even if you have a single-family home, the space becomes smaller because you cannot go sit outside on the deck as often or play in the backyard as often.

      At some point, the price adjustment will equalize itself out. But I bet the desire for single-family homes will continue for years.

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